In an interview Tuesday, Jacques Bonneau, president and chief executive of ACE Tempest Re, said the move into China is the result of the country's explosive rate of growth. He estimated the Chinese market is around the 11th-largest insurance market overall "with one of the lowest levels of insurance penetration," he said. "We think the timing is quite good to develop our presence in the Chinese marketplace."

Ace Tempest Re joins industry giants Swiss Re, Munich Re and General Re, which is a unit of Berkshire Hathaway (BRKA, BRKB), as well as the state-owned China Reinsurance Group.

Initially, Ace Tempest Re may focus on risks specific to particular industries, including large construction projects or offshore energy installations. Another area of focus may be for liability issues relating to products exported to other countries.

Bonneau said that the company is evaluating offering coverage for natural catastrophes and still needs to evaluate data quality and third-party risk-modeling firms to develop its products.

He noted that a large number of Chinese insurers are forming and said that Ace Tempest Re could become more involved in helping them create products to meet the needs of their clients. "That could be a way of generating new products for carriers themselves" as well as differentiating Ace and expanding the market for its reinsurance capacity.

As one example, he described the professional liability market in China as "embryonic" and potentially an opportunity for product development.

Over the past several years, Ace Tempest Re has expanded from its initial offerings of property catastrophe lines into other reinsurance lines and has expanded into regions beyond the U.S.

"We started out as a property catastrophe reinsurer, one of the more technically sophisticated reinsurers in terms of using models and are now a major player in that marketplace," he said.

He said the company has not yet determined the amount of capital it will make available in the Chinese market, but said the company intends to be "a meaningful player" there.

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